Consumer groups watch bailout closely

September 24, 2008 5:49:51 PM PDT
Consumer groups are keeping a close watch on the financial bailout talks and they're urging Congress to slow down and not rush to a speedy decision because they want to make sure taxpayers get a fair deal.

Two consumer groups, Public Citizen and Consumer Watchdog came out swinging. They say, 'If we are going to hand over $700 billion in tax dollars to rescue Wall Street, there should be plenty of protections for all of us on Main Street.'

Consumer advocates didn't get to talk inside the congressional hearings that took place on Wednesday. They weren't asked, but outside they had a lot to say.

"It's like give us the money and it's a slush fund for Wall Street paid for by Main Street. That's outrageous. The consumer needs some kinds of protections as well. After all they're the ones paying the bill," says Joan Claybrook, the Public Citizen president.

The advocates said taxpayers should not have to give away money without getting a great deal in return.

"If Congress is going to bail out Wall Street banks and financial companies, that got us into this mess, the least they can do is put a cap on how much money these companies can take of our money and then loan it back to us with interest," says Harvey Rosenfield, from Consumer Watchdog.

The groups proposed protections like a cap on interest rates ? so banks can't borrow money from the government at two percent and then lend it out at 25 percent. They also proposed a stake in companies that receive bailout money, and salary limits for executives.

In San Francisco, the California Reinvestment Coalition called for protecting homeowners facing foreclosure.

"Neighborhoods, homeowners and tenants are all being forgotten in this and the administration is focusing everything on Wall Street," says Alan Fisher, from the California Reinvestment Coalition.

The coalition wants a six month moratorium on foreclosures and the authority for bankruptcy judges to modify loan payments.

Congress is considering some protections already, such as salary and bonus caps for executives. However, consumer groups say that isn't nearly enough. We'll see if Congress listens to them at all.


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